Japan's top 3 banks to book $1.9 billion loss on TEPCO

By IBT Staff Reporter On 04/19/11 AT 11:00 PM

Japan's top three banks are planning to book a combined loss of 160 billion yen ($1.9 billion) on their stakes in Tokyo Electric Power <9501.T>, whose shares have tumbled sharply due to the crisis at its crippled nuclear plant, sources said on Wednesday.

Shares of Tokyo Electric have slumped nearly 80 percent since the March 11 earthquake and tsunami tore through its Fukushima Daiichi plant, forcing the banks to reassess the value of their shares for the financial year ended March 31.

Sumitomo Mitsui Financial Group (SMFG) <8316.T> will book the biggest valuation loss of about 80 billion yen, followed by Mizuho Financial Group <8411.T> at 50 billion yen and Mitsubishi UFJ Financial Group (MUFG) <8306.T> at 30 billion yen, sources at the banks told Reuters.

The sources spoke on condition of anonymity because the losses have not been announced publicly. Officials for all three banks said nothing has been decided and declined to comment further.

As of Sept 30, 2010, Sumitomo Mitsui Banking Corp, a core unit of SMFG, owned a 2.7 percent stake in Tepco. Mizuho Corporate Bank, a unit of Mizuho, held 1.8 percent of the troubled utility.

Last month, the three banks made a total 1.4 trillion yen in emergency loans to Tepco, which is struggling to bring the nuclear plant under control and is bracing for a massive bill to compensate local residents and businesses.

Shares of SMFG were flat in early morning trade, while MUFG gained 0.3 percent and Mizuho rose 0.8 percent. The benchmark Nikkei average was up 1 percent.

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